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Tiger Airways passengers in Australia with flights booked for August can cancel their tickets without being penalised, while the grounded airline waits to hear when it will be cleared to fly again.

It has given a number of undertakings to the Australian Competition and Consumer Commission (ACCC) which the consumer watchdog says will ensure Tiger passengers aren't left out of pocket by the airline's grounding.

The grounding currently runs until August 1 but the airline has agreed that anyone with bookings for August can cancel their tickets without penalty.

It had previously promised full and automatic refunds for people who had been due to fly with it in July and has pledged to do its best to provide the refunds within 20 days from the date they were cancelled.

After being criticised by state and federal consumer regulators for taking too long to stop selling tickets as it waited to see if its initial week-long grounding would be extended, Tiger has agreed to tell the ACCC in advance when it intends to resume sales.

The ACCC said the airline had reacted to the concerns and was in the process of implementing changes to ensure appropriate remedies were offered to passengers.

"The ACCC decision to accept this commitment from Tiger Airways provides clarity to affected consumers and ensures that they are not left out of pocket," ACCC chairman Graeme Samuel said.

The commitment from Tiger Airways chief executive officer Tony Davis covered the provision and processing of consumer refunds and communication with affected passengers.

Tiger said it had reassured the ACCC that it had put in place effective measures to satisfactorily manage any passenger disruption beyond July.

The Civil Aviation Safety Authority (CASA) initially grounded all Tiger Airways Australia's domestic flights for a week from 11pm on July 1 over safety concerns but is extending that until August 1 while it completes its investigation.

"While safety underpins our operations at all times, Tiger Airways aims to resolve CASA's concerns and resume services by 1 August 2011 or earlier," the airline said on Friday.